Household formations are expected to increase in 2013! The great recession of 2008 saw many young people moving back with mom and dad, older adults moving in with family members, even divorced couples living under one roof just to keep a roof over their heads. People got roommates. Our world shifted.
Pre-bust years new household formations averaged about 1.3 million a year. This number has been down to as low as 500,000 since the housing bust in the fall of 2008 but has been slowly gaining momentum as the economy recovers. I have hear some experts predict we could hit as high as 1.2 to 1.25 million this year. Household formation doesn’t necessarily means home sales but it is a fair bet that many of these new households will be buyers. There have got to be a lot of young adults excited about the prospect of moving out on their own and a lot of parents happy to have their home back to themselves! With economic recovery and general stabilization we will see higher household formation number in the coming years bringing us back into the ‘normal range’. The improved economy along with historic low interest rates should spur a spring housing boom that carries us through the next few years.